Soaring High Property Values And A Possible Housing Market Recovery
Soaring High Home Prices
Soaring High Home Prices
Home values across the country are starting to soar once again. One of the worst housing markets the United States has ever seen is gradually starting to recover. Home prices are beginning to soar in markets like Phoenix, Arizona and Las Vegas, Nevada. Phoenix saw an increase in property values of 7.7 percent over the last year. However, property values and home prices in the majority of markets across the country remain at record lows. Real estate investors buy homes for pennies on the dollar expecting values to gradually increase. Soaring home prices mean many investors are now pumping money back into the housing market.
Home and Property Sales on the Rise
New and existing homes sales have seen a 10 percent increase over the past year. Foreclosure sales are rapidly decreasing as investors are offering to help delinquent borrowers with short sales. Some markets that saw record levels of inventory at the peak of the housing crisis are now seeing supply shortages. A supply shortage is good news for markets that are suffering from depressed home values. The laws of supply and demand apply to the housing market as they would any other market. With a supply shortage in the housing market and continued rising prices, investors are willing to pay much more than they would a year ago. The data is a clear sign the housing market is slowly starting to recover from the bubble of 2008.
Good or Bad News for the Housing Market
Higher or rising property values is welcome news for investors who are looking to extract equity from their investments. Also, sellers who have waited patiently for the market to rebound are now putting their properties on the market. However, experts fear that additional listings will cool home prices in the near term and keep the housing market from a sustainable recovery.
What to Expect
Although the housing data is good news for real estate investors, they should not expect the type of recovery that leads to a full housing boom. The labor market and housing market coincide with one another; therefore, weak employment numbers might keep the housing market at depressed levels. Rising home prices are welcome by those who are currently underwater on their mortgage. Mortgage holders have many more options when the value of their home increases. They can choose to refinance their home into a lower rate or sell their property for more than the value of the mortgage. The more options a property owner has, the better chance the industry can complete a full and sustainable recovery.